Correlation Between Boston Scientific and Adapthealth Corp
Can any of the company-specific risk be diversified away by investing in both Boston Scientific and Adapthealth Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Boston Scientific and Adapthealth Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Scientific Corp and Adapthealth Corp, you can compare the effects of market volatilities on Boston Scientific and Adapthealth Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Boston Scientific with a short position of Adapthealth Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Scientific and Adapthealth Corp.
Diversification Opportunities for Boston Scientific and Adapthealth Corp
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boston and Adapthealth is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Boston Scientific Corp and Adapthealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adapthealth Corp and Boston Scientific is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Boston Scientific Corp are associated (or correlated) with Adapthealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adapthealth Corp has no effect on the direction of Boston Scientific i.e., Boston Scientific and Adapthealth Corp go up and down completely randomly.
Pair Corralation between Boston Scientific and Adapthealth Corp
Considering the 90-day investment horizon Boston Scientific is expected to generate 1.04 times less return on investment than Adapthealth Corp. But when comparing it to its historical volatility, Boston Scientific Corp is 3.71 times less risky than Adapthealth Corp. It trades about 0.19 of its potential returns per unit of risk. Adapthealth Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 729.00 in Adapthealth Corp on August 25, 2024 and sell it today you would earn a total of 257.00 from holding Adapthealth Corp or generate 35.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Scientific Corp vs. Adapthealth Corp
Performance |
| Timeline |
| Boston Scientific Corp |
| Adapthealth Corp |
Boston Scientific and Adapthealth Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Scientific and Adapthealth Corp
The main advantage of trading using opposite Boston Scientific and Adapthealth Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Scientific position performs unexpectedly, Adapthealth Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Adapthealth Corp will offset losses from the drop in Adapthealth Corp's long position.| Boston Scientific vs. Stryker | Boston Scientific vs. Abbott Laboratories | Boston Scientific vs. Medtronic PLC | Boston Scientific vs. DexCom Inc |
| Adapthealth Corp vs. Axogen Inc | Adapthealth Corp vs. Artivion | Adapthealth Corp vs. Integer Holdings Corp | Adapthealth Corp vs. Paragon 28 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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